Marijuana Stock Soars 3,000% after Story; Too High?

By Avi Salzman

This just in from the world of marijuana investing: a marijuana-related company saw shares jump as much as 3,000% this week after Marketwatch mentioned it in a story about “How to Invest in Legalized Marijuana.”Medbox (MDBX), which makes medical marijuana dispensers, reached $215 per share at its height on Thursday, up from $4 on Monday.

“Dr. Bruce Bedrick, CEO, suggested that while the company’s present business strategy is working well and their new product line continues to garner interest in the conventional pharmaceutical distribution channel, the company attributes the share price increase to a lack of float and not based upon present business economics…In the days since the article, Medbox has seen their stock rise over 3000%, giving the company a market cap of $2.26 billion. The management of Medbox is concerned about the sudden and pronounced increase in their stock price and is taking steps to reduce these tremendous price swings. ‘We will take steps to attempt to avoid a roller-coaster syndrome, with the stock rising and falling in dramatic fashion,’ Medbox company founder, Vincent Mehdizadeh stated.”

On Friday, shares fell about 90%, but were still worth about $20 per share.

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